The Digital Disruption Of The Banking Industry

A vendor uses a credit card system to complete a sale during a baseball game at Tropicana Field in St. Petersburg, Florida. The Rays became the first professional sports team to go cashless for all transactions this season.

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Dan Schulman is the CEO of online payment company PayPal, sure.

But he also practices Krav Maga, a style of martial arts used by the Israeli military.

But the overrunning philosophy of Krav is that the best way to win a fight is to not get into a fight. It’s very Zen in that way. How do you de-escalate situations? We spend a lot of time thinking about that. It’s translated into the way that I think about business as well.

When we started partnering with Visa and Mastercard and JPMorgan Chase and Citi, nobody ever thought that PayPal would be allies with those companies. That would always be an uneasy friend relationship. But my view is, “How do you give customers the choice they want, and how do you avoid fights that you don’t necessarily need to be in?” And it was maybe one of the key things that catapulted PayPal’s success in recent years.

Platforms like PayPal have caused banks to scale back or shift, to adjust to the new ways people interact (or don’t) with money.

If you don’t use PayPal directly, maybe you’ve downloaded another cashless app like Venmo (also a PayPal brand). Instead of handing over a couple of bills, maybe it’s now easier to tip a manicurist or split a check with a friend via an app. Long-established banking institution J.P. Morgan has developed one, among other banks.

The social media giant says Libra will attempt to make financial services more inclusive, because “access to financial services is limited or restricted for those who need it most — those impacted by cost, reliability, and the ability to seamlessly send money.”

Libra uses cryptocurrency technology and has already run into criticism by lawyers and Congress alike.

The point is that, along a plausible future path, [Libra] will gain immense power, and it’s not beholden to the public, unlike the central banks that manage national currencies. For all the glitzy futurism of cryptocurrencies, Libra is a step backwards in social and political terms, the way bitcoin tried to throw us back into the age of the gold standard.

We talk to PayPal’s Dan Schulman about corporate responsibility and the future of e-commerce. Then, we continue the conversation with a financial journalist and a community development bank executive about Facebook’s Libra and issues of equity in banking.